Pernod Ricard has crossed Rs 10,000-crore annual sales mark in India, making the country the third-largest market for the French spirits giant, ahead of its home market.Sagar Malviya | ET Bureau | December 04, 2015, 18:30 IST

Pernod Ricard has crossed Rs 10,000-crore annual sales mark in India, making the country the third-largest market for the French spirits giant, ahead of its home market.Mumbai: Pernod Ricard has crossed Rs 10,000-crore annual sales mark in India, making the country the third-largest market for the French spirits giant, ahead of its home market. The maker of Absolut vodka and Chivas Regal Scotch posted sales of Rs 10,210 crore for the year ended March 2015, 19% higher than the previous year, according to its annual return filed with the Registrar of Companies last week.

Market leader United Spirits reported revenues of Rs 20,502 crore during the same period, a decline of 1% from the previous year. Experts said Pernod Ricard’s strategy of focusing on the higher price points and avoid competing at the bottom end of the market has paid off in India with its premium brands finding a lot of buyers.

“The strategy has paid off handsomely, with Pernod achieving sales and profits per case far in excess of market leader USL where several brands remain underinvested,” said Societe Generale analyst Vivek Veda. He said the company gets bulk of its revenues and profits from just three major whisky labels — Royal Stag, Seagram's Imperial Blue and Blender's Pride — and 100 Pipers Scotch.

An email ETsent to Pernod Ricard India for comments did not elicit any response as of press time Thursday. According to research firm Euromonitor, Pernod Ricard's market share in India increased to over 11% in 2014 from 8% four years ago, while the share of United Spirits, which is now the Indian arm of the world’s largest alcoholic beverages maker Diageo, fell to 39% from nearly 43%.

Diageo, which owns marquee brands such as Johnnie Walker and Smirnoff, managed to get a firm foothold in the country with the acquisition of USL’s mass brands such as McDowell’s No 1, Bagpiper and Director Special. Since last year, Diageo has implemented several changes, including exiting unprofitable markets, identifying 14 power brands to drive focus, reducing working capital in trade and reworking the brand-market combination, to focus on brands that make a positive contribution to EBITDA.

Pernod Ricard India, meanwhile, plans to borrow up to Rs 1,500 crore to fund its expansion and challenge the dominance of United Spirits. “India is a fascinating market with sizable potential: more than 22 million people reach the legal age of alcohol consumption each year. That’s 220 million people over the course of a decade,” Alexandre Ricard, group chairman of Pernod Ricard, had said in the company’s 2015 annual report.